In Real Estate, there are three things that determine whether or not a home will sell quickly and at the top of its market: location, condition & PRICE.
What Is A CMA?
A Comparative Market Analysis is a comparison of the recently sold price of the other homes in your neighborhood that are most similar to your own. It is not as simple as just an average price per square foot or what is promoted as the estimated sales price for your home on popular national sites. Zillow and Trulia have both acknowledged that their estimates can be off by as much as 20% in either direction. A Realtor has access to the MLS data which will show the actual sold dollar value of each home and will have the expertise to assign a fair dollar value to your upgrades and improvements.
Shouldn’t I Price Higher Than Market Value To Allow Room To Negotiate?
This seems like a logical approach but it actually works against you. Let’s say you price your home at $225,000 when the market value is really $200,000. Buyers looking in the $225,000 – $250,000 range in your neighborhood will have different expectations of a home and yours will fall short. They will quickly see that and move on. At the same time, buyers who are looking for homes like yours will never see it as they are only searching for the $200,000 point and yours well exceeds that. This is why homes often sit despite listing in a seller’s market.
I Think I Will Just Price It High And Lower After 30 Days If I Don’t Get An Offer.
Deal killer #2. Your best buyer – the guy who is ready and able to buy and will pay full market value is usually one of the first people to see your home. In a market with little to no inventory, he has often lost in bidding wars and is ready to come in with his best and highest right out of the gate. And so are several other buyers just like him. In a fast-moving seller’s market this window may only last a week or two.
By waiting to lower, you have eliminated your best buyer and your house starts to look stale. (Yes, even after only two weeks.) People start to wonder why it hasn’t sold when others have gone in days. And PRICING HAS MOMENTUM. Once you start dropping, there is a tendency for the buyer to think you will drop more. But, let’s suppose we are in the other market – the buyer’s market. Here, overpricing can be a death knell. Buyers have more power and it is akin to a shark smelling blood in the water. Once an over-priced listing sits for a while and sellers lower, the buyer smells an opportunity to low ball.
So How Do I Know If My House Is Priced To Sell?
This is where a Realtor can prove to be invaluable. He or she has the market knowledge, the understanding of the most recent comparables, and the pricing experience to advise you properly.